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A universal binary is, in Apple parlance, an executable file or application bundle that runs natively on either PowerPC or Intel-manufactured IA-32 or Intel 64-based Macintosh computers; it is an implementation of the concept more generally known as a fat binary.
Thanks to the Mach-O executable format, which allows for “fat binaries," containing code for multiple architectures, Xcode can build universal binaries, which allow software to run on both PowerPC and Intel-based (x86) platforms and that can include both 32-bit and 64-bit code for both architectures.