They are chip makers. Camera makers are their customers. The chip makers are only relevant to the point that the technology was already inside their chips that Red was claiming as theirs. Patents are awarded based on new and innovative, not that which was already known, discussed and used previously. Henry Ford made cars, but if he wanted to sue other carmakers because they copied using wheels for rolling, he would not have been awarded a patent because the use of round wheels for rolling was a prior art, well known, discussed, understood and existing prior.
Apple must have thought it was worth throwing the challenge flag. There was clearly strong support their position was winnable. So on the basis of what they or the U.S. attorneys understood about it, it was decided in Red's favor. And based on what I think about it as a layman, it looks to me like Red should not have been awarded patent protection on the basis of asserting there was no prior art. But that's just my opinion.
Apple must have thought it was worth throwing the challenge flag. There was clearly strong support their position was winnable. So on the basis of what they or the U.S. attorneys understood about it, it was decided in Red's favor. And based on what I think about it as a layman, it looks to me like Red should not have been awarded patent protection on the basis of asserting there was no prior art. But that's just my opinion.