Clearly with a broad license on the ARMv7 instruction set architecture, Apple would have had the option to use Mali. It may even have noticed that with ARM providing physical IP there may come a point where Mali is available on leading manufacturing process technologies before the latest and greatest PowerVR core is.
ARM also has the advantage of discounting price when more than one ARM core is present in a design.
And then there is the rumor that Samsung is Apple's chosen foundry for the A4. This would represent continuity with the iPhone application processor and may have led to suggestions that the A4 is a Cortex A-class dual core plus graphics. In the past Samsung is a user of graphics from Imagination but Warren East, president and CEO of ARM was clearly pleased to have signed up Samsung as a Mali licensee (see ARM hints at graphics success with Samsung deal).
And that license is not new. It has been there for over year (see ARM touts graphics IP licensing opportunity)
And so the arguments are evenly poised. Continuity with a proven graphics cores from Imagination. Or listen to ARM saying you can drive down to 32-nm faster with a Cortex-Mali combination and get a discount.
However, there are many reasons to use graphics; for 2D work, for 3D, for supporting video, for fast movement of icons. It is quite conceivable that PowerVR and Mali could co-exist in the A4 or it is equally possible that Apple has ignored both companies and done its own graphics core, the approach taken by Qualcomm in its Snapdragon series of mobile microprocessors.
My current best guess it that the A4 comprises a dual-core A-class processor tweaked by Apple engineers to take it beyond the stock offering from ARM, together with PowerVR SGX support.
But we also know that Apple likes to ring the changes with its suppliers to keep them hungry for more business and honest on price, so Imagination should expect to face some Mali competition inside an Apple processor soon.
Related links and articles:
ARM success could trigger takeover bid, says analyst
Samsung extends licensing deal for graphics cores
Imagination preps three-tier Meta processor roadmap