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This paper investigates eddy-current in an axial flux permanent magnet (AFPM) machine, which consist of the segmented stator teeth and concentrated winding, with one inner rotor and double stators. Analytical methods was developed to calculate the eddy-current loss of PMs and other solid components, including effect of winding harmonics and permeance variation due to slot opening. Eddy-current losses were analyzed by time-stepping three dimensional finite element analysis (3D FEA) in two rotor models, when magnets are insulated or noninsulated. A prototype machine was manufactured based on analysis results, and was tested as a generator. It is found that rotor stainless PM holder should be used in order to reduce eddy-currents and insulation of PMs further reduces eddy-current losses.