This summer, AOL and Orange raised the bar by offering a free laptop to customers in a calculated bid to lock them into long-term broadband contracts. We've investigated such deals, and give you the PC Advisor low down on the whys and wherefores of free laptop PCs offered in return for a long-term broadband contract.

In September, AOL, which is now part of the Carphone Warehouse group, began supplying free Dell laptops said to be worth £500 to any customers willing to sign up to its service for two years.

AOL’s move followed a more half-hearted offer from rival ISP Orange, which teamed up with PC World to offer a free £300 laptop or £350 off other models to customers who signed up to its broadband service for a minimum of 24 months. However PC World was forced to withdraw the offer just weeks into the promotion, claiming the offer was "a victim of its own success".

The AOL offer, however, is still very much alive. Customers who opt for a two-year contract for AOL’s broadband service receive a coupon for a free base-model Dell Inspiron laptop (click here for review) laptop. AOL Broadband costs £20 per month.

The deal includes broadband with connection speeds up to 8Mbps, a 40GB monthly usage allowance, a free Netgear wireless router and no connection charge. The laptop comes with an Intel Celeron 540 processor, 1GB RAM, an 80GB hard drive, Microsoft Vista Home Basic Edition, a 15.4in screen and an eight-speed DVD-RW optical drive. It’s also Wi-Fi-enabled.

You can upgrade the Inspiron with a 120GB hard drive (for an additional £50) or a 1520 Core 2 Duo processor and 2GB RAM (for an additional £150). Both upgraded models run Vista Home Premium.

Next page: the up sides and down sides of free laptop broadband deals

PCA PODCAST: GET LAPTOPS & BROADBAND FOR FREE

In this month's PC Advisor podcast, we discuss the emergence of 'free laptops', 'free broadband' and 'free software', and check out the best deals available to UK consumers. PLUS: find out why technology vendors are so keen to give their wares away, and learn how to avoid the pitfalls inherent in such freebie deals.

Up sides and down sides

If you’re after a hard-core gaming machine, you should look elsewhere. But if all you need is a broadband-enabled Vista laptop for word processing and browsing the web, you could do a lot worse than this deal (see previous page).

With the £15 laptop delivery charge, you’re forking out a total of £495 over the 24-month period for the AOL Broadband deal. That’s just £5 shy of the laptop’s claimed value, but you’re getting broadband access as well. These hardware-driven deals are good value – and they’re likely to prove popular. Blink and you might miss them.

The down sides are as follows: you’re tied into a broadband contract for two years as opposed to one. It’s a bit like signing up for a fixed-rate mortgage: if you sign up for a monthly subscription today, you may find prices go down over the course of a year and you’re unable to extract yourself from your contract. For most people, however, this is hardly a major hardship.

Another danger is that broadband providers might get a too little clever for their own good. As ISPs and retailers vie for an increased share of the UK’s broadband customer base, we could see another Hoover debacle. The company’s ‘free flights’ offer in 1992 famously resulted in a level of demand that rose far beyond the company’s expectations. The resulting £50m in financial losses eventually led to the sale of the British division to Italian manufacturer Candy.

A spokesman for AOL was keen to point out that the company had stockpiled 100,000 Dell laptops in anticipation of demand. Smaller, less well-funded companies, however, could come a cropper – potentially leaving the customer out of pocket. Bear this in mind when considering deals.

PCA PODCAST: GET LAPTOPS & BROADBAND FOR FREE

In this month's PC Advisor podcast, we discuss the emergence of 'free laptops', 'free broadband' and 'free software', and check out the best deals available to UK consumers. PLUS: find out why technology vendors are so keen to give their wares away, and learn how to avoid the pitfalls inherent in such freebie deals.