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This paper presents an analytical method to calculate the air-gap magnetic flux of interior-type permanent-magnet (IPM) machines taking into account the assembly gap and saturation in stator and rotor. Special considerations are given to the calculation of leakage flux in the nonlinear magnetic short circuit or the "magnetic bridges." An equivalent magnetic circuit was developed, and a computer-aided graphic analysis program calculated the magnet operating point. The Norton equivalent of flux concentration structures was studied. Agreements have been obtained between the results of the analytical model, finite-element analysis, and test results on prototype motors.