I think how it all comes together really depends on your child.
My DD knew the names of all the letters by age 2, but I'm embarrassed to say that it never occurred to me to tear her the letter sounds. She entered a Montessori preschool at about 2.75, where they DID teach her that letters had sounds, and by age 3 she could sound out most simple words (shocking her teacher, who hadn't actually gotten past "letters have sounds"). By age 6, her comprehension level was around 8th or 9th grade.
DS (currently 6.5) knew all the letters around age 2 and the letter sounds shortly after, and around age 3 surprised me by deciphering small words "in the wild"--common words like "in" and "out" on doors. Around age 3.5 he asked to learn to read, but he didn't enjoy the work of actually sounding out words so it was kind of touch and go for a long time. His school taught no phonics until he entered a Montessori at age 4.5, at which point he was reading decently well and thus had no interest whatsoever in learning phonics. This has been a real struggle, actually, because he's learned a great many words but as sight words. He skipped Kindergarten and was placed in the highest reading group in his 1st grade class, but meanwhile I have sent him to tutoring because he couldn't spell to save his life and it was making him very frustrated. It's possible there may be something 2E going on with him.
