Historically, Apple maintained two distinct gift card systems:

Purchasing an iPhone with iTunes and Apple Gift Cards In recent years, Apple has streamlined its payment ecosystem, making it possible to use older to buy hardware like the iPhone . While these cards were originally restricted to digital content, Apple's transition to a universal Apple Gift Card means that once these funds are added to your Apple Account balance , they can be applied toward physical products. The Evolution of Apple Gift Cards

To use your gift cards toward a new device, you must first link them to your Apple ID.

Today, in regions where the universal is available, all these legacy cards can be redeemed into a single Apple Account balance . This unified balance can then be used to purchase anything from an iPhone to an iCloud+ subscription. How to Use Your Balance for an iPhone