Use Xcode 7 with iOS 10

Question

You need use DeveloperDiskImage from Xcode 8 Beta. For this extract Xcode 8 Beta app and copy DeveloperDiskImage for iOS 10 to your Xcode folder.

Suppose you extract Xcode to Downloads/Xcode-beta.app

cp -r /Users/fanruten/Downloads/Xcode-beta.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0\ \(14A345\) /Applications/Xcode_7.2.1.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport

After copy DeveloperDiskImage you should start Xcode and connect iOS device to your mac.

Edit:
With a standard Xcode install one can create a soft link:

sudo ln -s \
/Applications/Xcode-beta.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0\ \(14A5309d\) \
/Applications/Xcode.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0

You can use any SDK on an older build of Xcode simply by copying and pasting the folder of the OS you need. Also you obviously cannot have two apps with the same name so just rename them to Xcode 7 and Xcode 8.

right-click / ctrl-click the Xcode 8 application icon to show the package contents and navigate to this location and copy the iOS 10.0 or WatchOS 3.0 folder etc.

/Applications/Xcode8.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport /Applications/Xcode8.app/Contents/Developer/Platforms/WatchOS.platform/DeviceSupport

Then navigate to the same location in Xcode 7 and paste the folder.

/Applications/Xcode7.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport /Applications/Xcode7.app/Contents/Developer/Platforms/WatchOS.platform/DeviceSupport

Restart Xcode 7. You'll have to wait a while for Xcode to rebuild the symbols etc.

For me none of the above suggestions worked.

Instead, I navigated to this location(press CMD+SHIFT+K to insert the below path) (through finder)

/Applications/Xcode-beta.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport

And copied the 10.0(14A5339a) folder, which contains the developer disk image. I then pasted it into

/Applications/Xcode.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport

EDIT: I'm using Xcode7 (version 7.3.1-7D1014),iOS 10 public beta 6(14A5345a)-this is released on aug 19,2016

Although copying the folder containing the disk image is still the best way to go, i had no time downloading the newest Xcode to get hold of the disk image folder, so i basically archived the app and exported it using the save for development deployment option, then installed it on the test device using iTunes app.

In my case i hade Xcode 8.0 wanting to build on a 10.2.1 iOS device.

Pascal && Fanruten are right.

tested on 12th aug, Xcode Version 7.3.1 (7D1014) AND iOS 10.0 (14A5309d) on iPhone6 Plus.

I made a symbolic link as suggested (path are a bit different... see below.) but works with linking to Xcode Version 8.0 beta 4 (8S188o).

only for completeness:

Beta 4

sudo ln -s /Applications/Xcode-beta.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0\ \(14A5322e\)/  /Applications/Xcode.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0

Beta 5

sudo ln -s /Applications/Xcode-beta.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0\ \(14A5339a\)/  /Applications/Xcode.app/Contents/Developer/Platforms/iPhoneOS.platform/DeviceSupport/10.0