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All the headlines that I’ve seen after Apple (AAPL) reported earnings for the December quarter (first quarter of the 2017 fiscal year) after the market close today say that Apple beat Wall Street projections by 14 cents a share on earnings.

Which sounds great–and certainly powered the stock in after-hours trading. Apple shares finished up 3.33% to $125.39 in that trading period.

But that beat disguises, as Apple intended, a pretty mediocre quarter. Revenue indeed beat Wall Street expectations for the quarter’s sales. But at $78.35 billion sales were just 3.3% better than the December quarter of last year. (Still that is an increase and breaks a string of three consecutive quarters of declining revenue.)

Earnings per share did indeed surpass forecasts, but that was because Apple spent the quarter buying back its shares. If Apple still had the same number of shares outstanding at the end of December 2016 as it had in December 2015, Apple would have actually reported a small year-over-year decline in earnings per share.

Guidance for the March quarter, the second quarter of the company’s fiscal year, was modestly lower with Apple telling analysts to expect revenue of $51.5 billion to $53.5 billion versus the current $54.04 billion Wall Street estimate. Gross margins for the quarter will be 38% to 39% against the current 38.7% estimate and versus 39.4% last year.

Not all the news was negative–especially given the very low expectations for the quarter. Sales of the iPhone 7 and 7+ in the quarter were 78.3 million units against projections of 77.3 million and 74.8 million in the December quarter of 2015. Mac sales climbed to 5.4 million units versus the estimate for sales of 5.2 million and sales of 5.3 million in the December 2015 quarter. Sales of iPads, which had been on a long-term downward trend, continued in that direction with unit sales falling to 13.1 million versus estimates for 14.7 million and sales of 16.1 million in the December 2015 quarter.

In yesterday’s earnings preview I said I expected Apple to dwell on the success of its service business. And that the company did–as service revenues gave Apple plenty to crow about. The Apple Store had its best month in history during the quarter. Revenue from the Apple Music service grew for a third consecutive quarter and the number of Apple Pay users tripled in calendar 2016 with transaction volume up in the quarter by 500% year over year.

The question is whether any of this matters–especially if any of the pessimistic stuff matters–to investors and traders who have their eye on the iPhone 8 introduction in the fall of 2017. If you do a completely unofficial and non-scientific survey of employees at your local Apple store (as I did a week ago), you’ll find that to a guy and gal they expect the iPhone 8 (or whatever it will be called) to be really, really, really cool. After all the phone will mark the 10th anniversary of the iPhone. And expectations in and outside Apple stores are that the company will blow out the introduction of new features to make up for a lackluster iPhone 7. (It looks at the moment like there will be three models with one sporting a super-bright OLED screen.) Investors see the iPhone 8 as driving a huge replacement cycle that will see annual iPhone sales growing to 250 million by 2019 from 215 million in 2016. Traders and investors also expect free cash flow to soar as the percentage of revenue coming from higher margin services increases. And, of course, there’s the expectation that policies introduced by President Trump will let Apple repatriate at a low tax rate billions in cash that are now trapped overseas.

It will be interesting to me to see how much support the stock gets from those second half of calendar 2017 expectations as Apple navigates what is likely to be at least one more mediocre quarter in March.

Apple is a member of my long-term 50 Stocks portfolio. I’d look to pick up share if Apple shows its typical summer weakness this year. The question I can’t answer now, however, is whether or not expectations for the iPhone 8 prevent that kind of slump this year.