The Raspberry Pi Foundation has begun manufacture of its £16 bare-bones PC that runs Linux.

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In May last year, the charity revealed its plans to manufacturer and sell the PC, which measures 86x54x17mm or roughly the size of a credit card. The device plugs into a TV or can be combined with a touchscreen to create a low-cost tablet PC.

One end of the PC features a USB port, which can be connected to a keyboard and mouse via a hub, while the other has an HDMI port and an SD card slot. The device includes a 700MHz ARM11 processor, 128MB of memory and a Videocore 4 GPU.

Raspberry Pi says the GPU is capable of BluRay quality playback, using H.264 at 40MBits/s. It has a fast 3D core accessed using the supplied OpenGL ES2.0 and OpenVG libraries. The PC also runs open-source software, so it's likely to use Linux as its operating system.

There are two versions of the PC: Model B which includes 10/100 wired Ethernet and is priced at $35 (£23), and Model A which doesn't come with Ethernet priced at $25 (£16).

"The first units from the first batch will be rolling off the line at the end of January. This first batch will consist only of Model Bs, although you will be able to buy Model As later on," the charity said in a blog.

"Details about whether we'll wait for all 10k to come off the line before starting sales, and about what date we'll be starting on, will come later."

However, the Foundation admitted that, despite its intentions to manufacture the PC in the UK, it has had to move assembly to Taiwan and China.

"We investigated a number of possible UK manufacturers, but encountered a few problems, some of which made matters impossible. Firstly, the schedule for manufacture for every UK business we approached was between 12 and 14 weeks (compared to a 3-4 week turnaround in the Far East). That would have meant you'd be waiting three months rather than three weeks to buy your Raspberry Pi, and we didn't think that was acceptable," the charity said.

"Secondly, we found that pricing in the UK varied enormously with factories' capacity. If a factory had sufficient capacity to do the work for us, they were typically quoting very high prices; we'd expected a delta between manufacture pricing between the UK and the Far East, but these build prices not only wiped out all our margin, but actually pushed us into the red."

Furthermore, the charity said the amount it would have to pay in tax if the device was manufactured in the UK was also causing a problem.

"So we have had to make the pragmatic decision and look to Taiwan and China for our manufacturing, at least for this first batch," the charity said.

"We are still working hard on investigating UK possibilities; at the moment, we're investigating an option which would mean that all the Model As (whose demand we expect to be much lower than that of the Model Bs) will be built in the UK, and at the moment that's looking quite do-able, although it's not as efficient economically as doing it in Asia."