Question is already answered and works as well, just adding one more answer as i got similar error in different scenario.
In my case i was using LaunchScreen.xib
which is alternative to using splash images.
https://developer.apple.com/library/ios/documentation/UserExperience/Conceptual/MobileHIG/LaunchImages.html
As stated in above link "In iOS 8 and later, you can create a XIB or storyboard file instead of a static launch image."
But even after using XIB i got this error.
To solve this i took screenshot of splash from 4 inch device running iOS 8, which was 640 × 1136 pixel. Renamed it to "[email protected]" added it to top level in project bundle.
Reason behind this error could be :
When apple transitioned from 3.5 inch devices to 4.0 devices, this image was compulsory otherwise app used to run in letterbox mode ( On 4 inch devices you will see black bars on top and bottom of application ).
So when i tried to run my application on 4 inch device/simulator running iOS 7.1 it was indeed running into letterbox mode ( when i only used .xib based splash ). The moment i added "[email protected]" letterbox mode gone plus apple approved app.