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The answer highlights that xcodebuild format xcpretty is designed as a fast and flexible formatter for build outputs in Xcode. It takes the output generated by xcodebuild, which can be quite verbose and complex, and reformats it into a more readable and compact format. This enhances the development experience by making it easier to read results related to builds, tests, and errors, thereby allowing developers to efficiently diagnose issues or track build processes.

This formatting capability is essential for teams looking to streamline the build process and improve overall productivity since it reduces the clutter and allows for a clearer view of the relevant information. The other options do not accurately represent the functionality of xcpretty. For example, static code analysis, performance profiling, and dependency management serve entirely different purposes in the development lifecycle and are not functions performed by xcpretty.