Color Labs, makers of the photo sharing app Color, which made a lot of noise last year when it attracted $41 million of pre-launch funding, is reportedly being snapped up by Apple. The iPhone maker will take on nearly all of Color's engineering staff and the company itself will be wound down, according to reports.

The Next Web broke the news, which is something of a surprise but not entirely crazy. Color was one of the most buzzed about apps around when it launched in early 2011, but the service, which sought to invent a new kind of location-based photo sharing, was ahead of its time and failed to find an audience. Since then, the company has reinvented itself as a Facebook app and been plagued with unflattering stories about shakeups in management and overzealous investors. Founder Bill Nguyen reportedly stepping back from daily operations due to disagreements with the board.

But the idea that Apple would see some potential in Color, or at least the people who built it, isn't all that farfetched. Color was an early pioneer in mobile photo sharing before Instagram became a household name, and it introduced some innovative concepts like an elastic social network that tracks users' location and interests and doesn't need to be managed by adding or removing friends. And Apple has a history with Nguyen— his previous startup, Lala, was acquired by the company in 2009 and served as the basis of its iTunes Match service.

If Apple has something similar in mind with Color, it's easy to imagine the Color team bolstering the Photos app in iOS, which recently got new sharing features in iOS 6.

[via TNW, AllThingsD]