Targeting a niche segment almost always seems like a winning strategy. There is always a temptation to carve out a niche when a category matures or seems to be growing well.
However, just because you have identified a good niche does NOT mean that it makes a good business case, no matter how sharply defined that niche is.
Often entrepreneurs make the mistake of getting excited about playing in a niche, and assuming that they can be leaders in that niche simply because they are super-focused ONLY on that segment. The truth however is that just because you focus on a niche does not mean that others who service broader segments are not at least as good as you, at servicing that niche as well.
Focusing on a niche makes sense only if that niche represents a fairly large market. Also, if servicing the niche helps you build competencies which can be leveraged across a broader segment, there is really no merit in building a ‘business case’ around that niche. Although, you could have multiple brands targeting different niche segments, with the common competencies deployed across all the segments.