What is itunes card used for on iphone

No, you don't need an iTunes gift card to update your iPhone or any Apple device. You also do not need iTunes Gift Cards to update apps that you've already bought or downloaded. Apple does not allow developers to charge for app updates, they can only charge for new features or consumables.

Apple Gift Cards are solely for the purchase of goods and services from the Apple Store, the Apple Store app, apple.com, the App Store, iTunes, Apple Music, Apple TV, Apple Books, and other Apple properties.