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Your Apple Id is used for everything Apple related.

To set up your iPhone, you have to log into your Apple account. Macs don't care as much.

If you use "Log In With Apple" then you'll lose that. And if you've decided to use the terrible Passkeys idea, you're locked out of that too.

So people can't use their iphones anymore?

There seem to be four main use cases:

(1) AppStore This is especially relevant on iPhones and iPads where this is the only way to practically access software and updates.

(2) iCloud Data sync and backup. Some iPhone/iPad software might insist on this to work.

(3) Subscriptions, purchases through Apple Music, software, movies, TV shows, Fitness, etc.

(4) ID for other services Using ApplelD to log into other services. Some don't allow for any other way of signing in.