Okay, you say, since no two products are exactly identical, how is my talk of niches not vacuous? Because it's not enough for the products not to be identical: they must be differentiated in the mind of the market. That is, the differences must matter to at least some part of the market. If you have a small market share, and you are unable to differentiate your product from its competition in some way -- price or features or both -- your market share will go to zero. The world is littered with examples; I'm sure you can think of plenty yourself.
Ask any angel or VC you know what they think of a business plan that proposes to capture a small fraction of a huge market, without laying out a viable marketing plan for differentiating the product.