I have been searching Google for the solution to this very cryptic error message, "target specifies product type com.apple.product-type.tool but there’s no such product type for the iphonesimulator platform", for months.
But, no. I've searched fruitlessly for months. Nothing turned up. I was building libmysqlclient as an Xcode project, but every time the build will halt when it hit that "com.apple.product-type.tool" error. I have since found a way to hack around that problem, but it held me up for months
Today, I restarted work on my Duomo project, my own replacement for Dreamweaver, etc. To do that I need to understand Safari WebKit. And the first thing I read today while working on Safari WebKit? "The first time after you install a new Xcode, you will need to run sudo Tools/Scripts/configure-xcode-for-ios-development in the Terminal to enable Xcode to build command line tools for iOS Simulator. Otherwise you will see the [stupid] error message ...”.
There. So big. The solution's there. On Apple's web page. Or does Google avoid indexing Apple's web pages : )