Shutterfly has acquired Penguin Digital, which develops mobile software enabling users to create prints and related physical merchandise based on photos snapped with their smartphone. Financial terms were not disclosed.

Penguin Digital launched its Mobile Photo Factory application for Apple's (NASDAQ:AAPL) iOS platform in early 2012. The MoPho app enables consumers to access photos from their iPhone or their Facebook and Instagram accounts to create device cases, mugs, key chains, apparel and canvas prints. In addition to the standalone app, Penguin Digital also supplies a software development kit enabling third-party programmers to integrate photo printing and product creation capabilities into their own mobile apps.

Shutterfly said it will rebrand and update the Mobile Photo Factory application over the coming months. Penguin Digital founders Reuven Moskowitz and Josh Friedman, along with the rest of their team, will also spearhead Shutterfly's new technology center in New York City.