Hi, I have a 2012 Volvo V50 and I used iPhone 5 and 5S with iOS 7 both and I had the same problem: phone call and music volume works with the steering controls but everytime I had to start and/or change the song from the device..
I also noted that sometimes it works well, but never after that I synchronized the device with iTunes.
I solved the problem in the last days: after that I've updated the iPhone 5S with iTunes (maybe you could also to backup it), I turned off the device and after this it automatically connect to the the car.
In this way I had no problems in the last 5 days so it looks ok now..
It's the only solution I found at the moment, I'll also go to the Volvo garage next week just to double check but I'm sure it's a matter of smartphone and not of the car..
Hope to heled you and apologize for my bad english..!
Thx
Alberto