The paper presents a methodology and supporting tools for developing component-based embedded systems running on resource-limited hardware platforms. The methodology combines two complementary component frameworks in an integrated tool chain: BIP and Think. BIP is a framework for model-based development including a language for the description of heterogeneous systems, as well as associated simulation and verification tools. Think is a software component framework for the generation of small-footprint embedded systems. The tool chain allows generation, from system models described in BIP, of a set of functionally equivalent Think components. From these and libraries including OS services for a given hardware platform, a minimal system can be generated. We illustrate the results by modeling and implementing a software MPEG encoder on an iPod.