This weekend we were looking for some simple wood magnet shapes from Grimm's Spiel & Holz for our young son when we came across this über cool (we maintain that "über" is not cheesy when referring to a German product) set of wood alphabet magnets for older children.
Besides the fact that the colors are gorgeous, these are more than just 26 letters - instead they are 77 magnetic wood pieces used to form the letters of the alphabet (and, as you can see, umlaut marks too) which makes this more challenging. Of course, your kids can form any shapes they want from these pieces as they transition from educational tool to toy.
The nearly $70 price tag hurts a bit, but we're mindful that they are well made (and built to last) with wood, water-based dyes and natural oils and certainly the kind of item that gets passed on and on (maybe to your grandchildren some day).
You can find Grimm's Spiel & Holz's Alphabet Magnet set here.