Though Merriam-Webster's Eleventh Collegiate Dictionary (2003) doesn't include that definition in its entry for space, people have used the term to mean "market sector" since at least the late 1990s. A Google Books search for "consumer electronics space" finds two examples from that period.
From Brandweek, volume 39 (1998):
Being No. 1 in the traditional computer space, we're pretty much there, but it's not enough, because we have to be No. 1 in the redefined consumer electronics space.
From Stereophile, volume 22 (1999):
Both Tweeter and Outpost.com are intent on entering the Internet consumer electronics space with full authorization from the manufacturers.
Such usage has proliferated in the past 15 years, embracing unexpected (and sometimes disturbing) areas of commerce. From The Knot Inc. [press release] (June 28, 2011):
Since launching in 1996, XO Group Inc. has gained dominant market share in the wedding space with the top two wedding websites, TheKnot.com and WeddingChannel.com, and launched the #1 website for newlyweds, TheNest.com, and the fastest-growing website devoted to pregnancy and first-time parents, TheBump.com.
As for the origin of the term, I speculate that it may have derived from a combination of influences—including "niche" understood as a recessed space; "sector" visualized as a pie wedge in two-dimensional space; and perhaps the idea of "shelf-space" in a metaphorical market. Another potential influence is the notion of "space" as a region of activity or investigation, as in this example from Encyclopedia of Computer Science and Technology, volume 31 (1994):
What he finds interesting about working in the "computer space" is that it is a world free of such physical constraints as gravity, material resistance, and time.