The paper studies potentials and limits of permanent magnet machines with toroidal windings in high speed applications. Three designs in different applications are used as test cases. The analyses based on analytical and FE models illustrate both merits and weaknesses of toroidally-wound machines that have not been addressed in literature. Strong external leakage of the armature field leads to relatively high inductance for a slotless machine and, yet, to susceptibility to losses in the housing. Losses in copper are, arguably, the decisive factor for suitability of this type of machine for a particular application; in particular, the machine is hardly suitable to applications requiring high power density. The paper finally demonstrates the importance of having a flawless winding process in order to avoid excessive core losses.