The home side were able to take the lead after their opponents were reduced to 10 men, but two dismissals for Northern Ireland allowed Cristiano Ronaldo to score a second-half hat-trick.
"I thought they scored against the run of play and we responded well to that having gone into our shell a little bit, but then obviously the second sending-off left us that man short and subsequently we weren't able to deal with that," BBC Sport quotes the manager as saying.
"You take the performance of the team, particularly for 60-65 minutes, I thought the energy and the shape of the team was very good.
"We were playing here against one of the top sides in Europe and people have to recognise that."
Northern Ireland face Luxembourg in their next World Cup qualifier on Tuesday.