The big thing going for them price-wise is that due to them being a charity, Broadcom is selling them the SoC at prices you would normally only get when buying millions of them, rather than the thousands that they will actually end up buying. Plus I think a lot of the engineers etc donated their time, again because it is an educational charity, thus their R&D was probably very cheap.

Thus we end up getting a device that is smaller and more capable than the Beagleboard XM (CPU- and graphics-wise) at one sixth of the price.