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My son knew all his letters at age 2 as well. At 3 he was reading out street and shop signs, and now at 4 he can read simple books by himself. All we did was read books with him from a young age. He watches about an hour of TV/videos every day, stuff like Pingu or Dora or Thomas or kids' songs on youtube - none of which can be credited with teaching him to read, I think it was just reading with him.
Some of his favorite books (in chronological order):