I went and bought a 30 pin to lightning adapter cable (the $39 one) to use with the BMW y-cable for ipod audio and it works... but the audio quality is plain terrible! I unplugged it, ran a regular aux audio cable from the headphone output and it sounds 10x better.
With the adapter plugged into the y-cable the audio sounds super compressed with little dynamic range. FM radio quality... or worse.
A far cry from CD quality or the regular y-cable ipod output. It looks like the adapter cable does D/A conversion inside the adapter and whatever it is doing just sounds terrible. The old 30 pin connector passed audio that was D/A converted in the iPhone/iPod which probably has better audio processing.
I am going to return this POS adapter tomorrow. I may have to look into getting an old iPod to use with the Y-cable or just stick to using the Aux cable.
Anyone else have any experience with the adapter?