The Ireland coach, who watched his side get swept aside by Australia in his second game in charge last week, elicited a major reaction against the All Blacks who trailed the fired-up hosts 19-0 after less than 20 minutes.
Ireland kept the lead until stoppage time but Ryan Crotty's try and Aaron Cruden's conversion ensured New Zealand became the first team to win all their matches in a calendar year since the game went professional 18 years ago.
"It's a step forward but a missed opportunity. You don't get too many opportunities to play against the All Blacks and you don't get too many opportunities to stop them doing something that was pretty special," Schmidt, playing against his native New Zealand for the first time, told a news conference.
"We were hanging on by a thread and the thread was just a little bit too thin to make sure that we did stop them... To be a minute away from history and to have the ball on your hands on their 10-metre line. Yeah, devastating."
Schmidt led Leinster to two Heineken Cup titles before being charged with breathing new life into an Irish team that endured their worst Six Nations in 14 years just four seasons after being crowned Grand Slam champions.
After a scrappy win over Samoa and last week's dismal loss to Australia, Irish fans got more than a glimpse of the kind of inventive rugby that got Schmidt the job in a first half that was one of, if not the best, played by an Irish team.
Big performances from try scorer Rob Kearney, captain Paul O'Connell and a much rejuvenated Gordon D'Arcy, together with relative newcomers like Devin Toner and Kearney's younger brother Dave, provided much encouragement for next year.
But a disappointed O'Connell has been here before, notably when Ireland beat Australia in the 2011 World Cup and produced a wonderful half of rugby in Cardiff earlier this year, and the big lock believes his side can learn from the All Blacks.
"They're further down the track than we are, they've been winning for a while now. They have that momentum that comes from confidence, we probably haven't got that yet. Everything becomes a little bit easier when you have that," he said.
"I think we'll get it. When you look at us on paper, we're an excellent side but over the last few years, we just haven't produced it consistently... There has been a few performances like this and we haven't built on them. That's the challenge."
While Schmidt contemplated one that got away, he received much praise from his opposite number Steve Hansen who marvelled at what he described as a "sensational performance" from the hosts that had rattled his record-breaking side.
"I think it's really important, particularly for the Irish folk here, that you don't see this as the All Blacks not having turned up. They turned up but Ireland turned up as well and they forced the mistakes early," Hansen said.
"We expected them to be tough. Every time we play them, they're tough but sometimes I don't know if they believe that they're as tough as they are and we saw a team play way beyond what you guys have seen for a while.
"It's important we acknowledge the performance from Ireland, I thought it was pretty special,"
(Editing by Alison Wildey)