Believe it or not, guys have nipples because women have nipples simply because all embryos start out as female (no wonder we like men). Gender becomes determined around six weeks of development as a result of hormone 'baths', triggered by the genetic character of the cells' chromosomes. So, the basic physiological structures are initially there, with the hormones released around the sixth week of development determining whether an embryo will develop male or female characteristics.
Nipples in men have no specific purpose, but can be very responsive to sexual stimulation. Nipples (in both men and women) are filled with many nerve endings and can be quite sensitive. They can be an erotic area for both men and women and respond to sexual touch and stimulation. Breasts are one of the defining structures that identify all mammals in the animal kingdom, and nipples occur in both the male and female of the species. It is interesting that in the higher mammals more closely related to humans, for examples, bonobo apes, chim- panzees, and gorillas, their nipples are quite prominently developed in the male rather than female.