Google's Ipad?

Speculation is growing on the internet that Google is planning  to release a tablet computer to rival the Ipad. According to rumours Google has teamed up with HTC and Verison and will be releasing the tablet at least in the United States before Christmas.

The tablet will run Googles Chrome OS rather than the Android OS designed primarily for mobile phones. To me this seems a strange choice if they are wishing to compete with the Ipad as Android already has a large user base and an existing app store. ChromeOS seems to have neither.

As a tool to watch Youtube, browse Facebook and check email this will certainly be appealing but I am confused  as to why google doesn't seem to want to take advantage of the App store business model. It strikes me that such a device would have to be sold much cheaper than the Ipad to have any real sort of impact.