This is fascinating news, although understandably upsetting for Imagination Technologies as a company.
It'll be really interesting to see what Apple has up their sleeves graphics wise. To dump Imagination they must (better) have something pretty amazing in the pipeline.
The one danger I could see for Apple here is that, as everyone knows, Imagination has made the best graphics chips in the mobile space for as long as anyone can remember now, and up until this point Apple has had almost exclusive access to their latest designs (barring some exceptions like the Playstation Vita). This virtual monopoly has given the iPhone/iPad a huge edge over the competition. But now that Imagination knows they're going to be dumped, I imagine they'll be looking to diversify.
While Apple's eventual chip may have a performance edge, if Imagination chips start showing up more in Android phones and tablets, this could seriously erode Apple's lead in GPU performance, and create a situation where Apple's performance is better, but no longer to such an extreme degree.
I also wonder what this means for Apple's overall longterm business (including the Mac). Apple's put a lot of money into developing their own in house CPU and now GPU tech, but they have to know that the smart phone market, particularly, the high end of the market, is nearing saturation in many parts of the world. Where does Apple see the kind of growth potential that warrants all of this investment...