Basically Google has opened a mobile phone store exclusively on the web. It will sell a range of phones which it believes best deliver the Google experience (whatever that means). You will be able to buy these devices independently of a mobile service plan/contract. Alternatively you will be able to purchase a new mobile service contract on the web store and receive a subsidy on the price of the phone. The store launched with a plan from T-Mobile USA and a Vodafone UK option will be launched in the coming months. One principal is that all phones (subsidized or not) will be unlocked so you are free to use whatever GSM SIM you wish.
So if you are in the UK you can get the phone right now and just drop in your existing SIM. I did this myself using the existing SIM I had in my G1. If you want a subsidy then you wait till the Vodafone plan is available and buy the phone with that. You can then migrate your existing number over to Vodafone plan using a PAC.
The Nexus One will not be available to purchase in any stores or on any website other than www.google.com/phone. So don't wait around expecting to be able to walk into your local Vodafone store and pick one up because you won't be able to.
Here is the Vodafone official press release.
The video's are embedded below for you to enjoy.
Walt Mossberg interviews Google VP of Engineering Andy Rubin on Android and the Nexus One from Nexus One News on Vimeo.
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