The secret gadget, identified by technology experts as being similar to a version found recently in a Silicon Valley bar, was given to a mobile phone accessory dealer in Ho Chi Minh City.
It remains unclear how the device, which has a front facing camera and has the distinctive Apple markings, arrived in Vietnam or if it is actually an Apple product.
Some claimed it may be a fake Chinese model.
If confirmed, it would mark a second serious breach in Apple's legendary wall of secrecy in as many months.
In March a technology news blog, Gizmodo, published details of an “invaluable” 4G prototype after it bought it from a blogger who found it in the American bar.
It created a furuore after details emerged last week that Steve Jobs, the Apple co-founder, personally tried to stop its publication.
Lawyers acting for the 55 year-old multi-billionaire claimed publication of the new generation phone’s secret features would be "immensely damaging" to the technology giant.
The website, which is owned by Gawker Media, was handed to the website by a 21 year-old blogger, Brian Hogan, who sold it for $5,000 (£3443).
A Silicon Valley police task force is investigating the website after the company, roughly valued at £242 billion, claimed the prototype had been stolen.
The latest pictures and video of an iPhone 4G were published online by the Vietnamese Web site Taoviet last week after they were posted by the dealer, Tran Manh Hiep.
The phone in the photos, are almost identical to the one which was lost in March and published by Gizmodo, the New York-based website.
Mr Hiep said the prototype 4th generation iPhone was not his but was shown to him by a customer.
He then filmed it and posted the video on a forum, where he was a moderator.
U.S. blogs then reposted video of an unidentified person holding the phone as well as several images of it being taken apart.
The new device has also been turned on, revealing an image of an explosion and the sign "Inferno" on the screen.
According to the MacRumors website, the iPhone pictures include the "N90" moniker, understood to be the internal code name for the next iPhone.
It also reported that a Vietnamese businessman, who has not been named but it thought to be a mobile phone dealer, bought the iPhone 4G in the U.S. while he was purchasing an iPad.
Engadget, a gadget blog, said that if a translation of comments posted on its website were true in its comments section is true, the man paid US $4,000 (£2770) for the device. A video has also been posted on YouTube.
Some Vietnamese messages posted on Mr Hiep's forum questioned the authenticity of the phone, suggesting that it may be a fake Chinese model.
Many counterfeit phones make their way into Vietnam.
But Mr Hiep, who declined to name the phone's owner, claimed it was a “real Apple product” because it worked with other products from the technology giant.
"It's a real iPhone because when I plugged it into a Mac, it recognised it as an Apple product," he said.
"I plugged it into iTunes and it recognised it as an Apple device.”
He said the iPhone he saw was very similar to the one published Gizmodo but it seemed "newer", with small changes such as the absence of two screws on the underside.
"It looks almost exactly the same as the one that appeared on Gizmodo's website. But it looks newer and has no screws."
According to Gizmodo, features of the new phone, expected to be unveiled later this year, include a front-facing video camera for video chat, a flash and an improved regular camera with a larger lens.
It also has a flat back instead of curved back, is thinner than the 3GS, is three grams heavier and has a battery that is 16 percent larger.
Apple jealously guards its unreleased products, particularly the iPhone. Last year Apple made $13 billion from its iPhone, which was almost a third of total company sales.