This is not really a new story. But it is not well advertised. At $35 the maker can not do much advertising.. Otherwise the price of the Raspberry PI would be triple;e. So how is possible to make a real computer for under $35?
Well, to start with, it has to use a TV set for the display. And you have too add your own Keyboard and mouse. The power supply can be a small unit like the ones used for cell phones or tape recorders. But the real key is the advancement in low-power high quality silicon chips.
If you want to learn more, here is an update about the Raspberry Pi personal computer. The price may now be lower.