iTunes and iCloud backups do not* backup content that can be retrieved from the cloud. This data includes apps, iTunes content and your photos if you have iCloud Photo Library enabled.
*During the backup process, this content is marked as part of the backup but not actually included in it. When you restore from a backup, it is re-downloaded from the cloud as long as it's still available.
Performing an encrypted iTunes backup or iCloud backup is the only way to ensure a seamless transition from one device to another.
Further reading:
https://support.apple.com/en-us/HT203977 https://support.apple.com/en-us/ht204184