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From guardian.co.uk:
Manchester City suffered a shock 1-0 defeat to Saudi Arabia side Al Hilal in their first pre-season outing in Austria on Friday evening. Shaker Nawaf al-Abed scored the only goal midway through the second half, although the manager Roberto Mancini will not be too worried at such an early stage of preparations for the defence of the Premier League title.
As you'd expect the side was very much a mixed one (with two different sets of players featuring in either half), shorn of the players who featured in Euro 2012 and featuring a number of younger Academy players.
The official site also has a report here and five minutes or so of match highlights are here.